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    C

    ARBON

    CAPTURE

    AND

    S

    TORAGE

    IN

    THEA

    LBERTA

    OIL

    S

    ANDSA

    DANGE

    ROUSMYTH

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    FOREWORD

    WWF Foreword to CCS in Oil Sands ReportThe oil sands are located in Canada but their exploitation and the resultinggreenhouse gas emissions have international implications. They are the largestreserve of petroleum in the world outside of Saudi Arabia, but the energy neededto extract and process this type of unconventional oil results in greenhouse gasemissions per barrel around three times those of conventional oil.

    This December world leaders will meet in Copenhagen to agree how theworld will tackle the growing climate crisis by cutting greenhouse gasemissions. It is hoped this will be part of a global shift towards a low carboneconomy. Developed countries like the UK and Canada have a leading roleto play and need to reduce their emissions by at least 40% by 2020 andalmost completely decarbonise by 2050.

    Both countries will need to make significant changes to their current policies ifthey are to meet these targets. In Canada, even with an aggressive applicationof carbon capture and storage (CCS) technology, the upstream emissions fromthe oil sands alone would take up the entire carbon budget for Canada underthe 80 per cent reduction scenario called for by scientists and agreed to byCanada at the 2009 G8 meeting.

    However, the oil sands present not only an environmental threat but also aneconomic one.

    In a highly carbon constrained world the price of carbon will increase.This means that companies committed to long-term projects with highcarbon emissions will become increasingly unprofitable, threatening peoplesinvestments and pension funds. This is beginning to be recognized and arecent survey of UK fund mangers found a significant number in favour ofmandatory emissions reporting for companies, as this would help them tomanage the exposure of their assets to carbon risks.

    CCS technology capturing the carbon dioxide emissions from oil sandsoperations and storing them underground has been put forward by thegovernments of Canada and Alberta, as well as many oil industry representatives,as their central strategy for managing greenhouse gas emissions in this sector.

    This report examines the potential of CCS technology to reduce emissionsfrom the Canadian oil sands, as part of WWFs broader work on definingpractical solutions and clear imperatives for meeting global energy demandwithout damaging the global climate.

    The conclusion of this report is that the application of CCS technology tounconventional oil is simply too little, too late, and too expensive to qualifyas a climate solution.

    There are also a range of other ecological and social costs from oil sands

    development which cannot be resolved by the application of carbon captureand storage technology.

    Investing heavily in oil sands is diverting money away from transforming theglobal economy into a sustainable one fit for the 21 century. We believe thereshould be greater transparency in the reporting of carbon emissions bycompanies to allow investors to assess the risks posed by carbon intensiveprojects. Ultimately this will mean that the money will be invested in otherprojects which have lower greenhouse gas emissions.

    WWF-UK is calling for a halt to the expansion of oil sands in Canada and theintroduction of mandatory carbon reporting by companies in the UK as setout in the Climate Change Act 2008.

    David NormanDirector of CampaignsWWF-UK

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    CARBON CAPTURE AND STORAGE IN THE ALBERTA OIL SANDS A DANGEROUS MYTH 1

    EXECUTIVE SUMMARYThe application of Carbon Capture and Storage (CCS)has been widely cited by supporters of the oil sandsas justification for ongoing expansion activities. This studyexposes the myth of CCS in the oil sands, finding it tohave no serious ability to mitigate greenhouse gas emissionsanytime this side of 2050. In its application to oil sandsdevelopments, CCS has limited potential to reduceupstream emissions to levels comparable with the averagefor conventional oil. Crucially, CCS will not enable oil sands

    products to meet emerging international low carbon fuelstandards or enable Canada to meet its internationalclimate change commitments.

    Albertas proven economically recoverable oi l sands reservesamount to 173 billion barrels of oil equivalent, with estimatesfor bitumen in place between 1.7 and 2.5 trillion barrels,making it second only to Saudi Arabia in proven reserves.Production reached 1.3 million barrels per day (bpd) in 2008and current projections place production between 2.5 and4.5 million bpd by 2020, with production capacity possibly

    as high as 6.2 million bpd.The extraction of oil from the oil sands is incredibly energyintensive. Studies have estimated that well-to-refineryemissions are on average three times more carbon intensivethan for conventional oil and that Well-to-Wheel emissionsare between 14 and 40% higher than the current averagefor conventional crude sources. These figures do not includeemissions resulting from the destruction of boreal ecosystems.

    In 2007, Canadas total greenhouse gas (GHG) emissionswere 26% higher than 1990 levels and 34% higher thanits then agreed Kyoto target. Furthermore, according tothe Intergovernmental Panel on Climate Change (IPCC),industrialised nations should seek to reduce emissions bybetween 25 and 40 per cent below 1990 levels by 2020,and 80 to 90 per cent by 2050 (IPCC 2007). It would appearthat Canadas current model of economic development istotally ill suited to its international environmental obligations.

    Carbon capture and storage (CCS) has been citedby supporters of the oil sands as the solution. It has beenclaimed that separation of CO

    2from combustion streams

    and from industrial processes is common in a number ofindustries and underground gas storage has substantialhistory as a result of acid gas storage and enhanced oilrecovery (EOR) projects. However, even the most optimisticestimates from industry experts claim reductions from oilsands upstream operations will be 10-30% in the mediumterm (and only for the more favourable sites) and 30-50%

    in the long term. Reductions of around 85% are requiredto make oil sands emissions comparable with the averagefor conventional oil production.

    The maximum reductions achievable using CCS wouldtherefore be insufficient to meet emerging low carbon fuelstandards, such as those in the European Union andCalifornia, even by 2050.

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    Furthermore, CCS cannot address the even larger down-stream emissions associated with burning the resultingfuel in vehicles, so that on a full lifecycle basis, emissionreduction potential is likely in the 7 to 11 per cent range.

    Significant barriers exist to CCS achieving its maximumpotential in connection with the oil sands. Not leastits expense, with estimates of between $60 to $290 pertonne of CO

    2captured ($200 to $290 for in situ production);

    which compares poorly with emissions capture from larger,highly concentrated sources, such as coal fired powerstations. It has been estimated that subsidies of $1 to$3 billion per year would be required from the governmentsof Alberta and Canada to successfully promote CCSprojects in Alberta. If these funds are invested in oil sands

    operations, then it is a major public investment in a technologythat cannot deliver reductions of the magnitude that arerequired if we are to avoid dangerous levels of climate change.

    The following graph depicts the high projected GHG emis-sions that would result from upstream oil sands operationsunder a constrained growth forecast and assuming a highlyaggressive deployment of CCS i.e. 10-30% industry-widereductions in 2020 and 30-50% in 2050. From a Well-to-Tank perspective, the emissions from the Alberta oil sandsalone would exceed Canadas entire carbon budget for2050, were it to meet what many consider to be a fair andappropriate GHG reduction target of 80% compared to 1990levels by 2050. This chart does not consider additionalenergy used for CCS, the destruction of boreal ecosystems,tailings ponds and other emissions, or choice of energysupplies with a higher carbon content.

    CARBON CAPTURE AND STORAGE IN THE ALBERTA OIL SANDS A DANGEROUS MYTH2

    Figure 1.1-1 Estimated Upstream (Well-to-Tank) Emissions with and without CCS

    300

    250

    200

    150

    100

    50

    0

    6

    5

    4

    3

    2

    1

    02007 2010 2020 2030 2040 2050

    MillionsTCO

    2e/a

    M

    illionsbbl/d

    Production

    Baseline emissions

    Emissions with CCS low(10% 2020 to 30% 2050)

    Emissions with CCS high

    (30% 2020 to 50% 2050)

    Canadas 2050 carbon budget in line

    with IPCC 2007 recommended target(118MT~80% of 1990 baseline)

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    CARBON CAPTURE AND STORAGE IN THE ALBERTA OIL SANDS A DANGEROUS MYTH 3

    Introduction to the Oil Sands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

    History and motivation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

    Growth rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

    Harvesting the Oil Sands. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

    Surface Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

    In-situ Extraction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

    Upgrading. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

    Refining. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

    Production Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

    Current Trends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

    The Economics of the Oil Sands . . . . . . . . . . . . . . . . . . . . . . . 10

    Other Environmental Impacts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

    Emissions to air . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

    Land impacts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

    Water impacts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

    Tailings ponds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

    Biodiversity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

    Indigenous communities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

    Greenhouse Gas Emissions from Oil Sands Operations. . . . . 13

    Review of LCA Studies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

    GHG Emissions from Construction . . . . . . . . . . . . . . . . . . . . . 14

    Well-to-Upgrader: Production of Bitumen. . . . . . . . . . . . . . . 14

    Upgrader-to-Refinery:

    Production of SCO from Bitumen. . . . . . . . . . . . . . . . . . . . . . . 15

    Refinery-to-Tank:

    Production of Gasoline Oils from SCO . . . . . . . . . . . . . . . . . . 17

    Tank-to-Wheels:

    Use of Gasoline in Transportation . . . . . . . . . . . . . . . . . . . . . . 17

    Summary of Emissions:

    Well-to-Tank and Well-to-Wheel . . . . . . . . . . . . . . . . . . . . . . . 17

    Export Upgrading / Export Refining. . . . . . . . . . . . . . . . . . . . . 17

    Carbon Capture and Storage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

    Types of Systems. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

    Separation Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

    Transmission. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

    Carbon Storage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

    Criteria for Carbon Storage . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

    Terrestrial/geological. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

    Aquifer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

    Solid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

    Tailings ponds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

    Oceanic. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

    Stability and Impact of Carbon Storage. . . . . . . . . . . . . . . . . 27

    Maturity of Carbon Capture and Storage . . . . . . . . . . . . . . . . . . 28

    Economics of CCS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

    ENGOs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

    The Pembina Institute. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

    Sierra Club. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

    Greenpeace . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

    Environmental Defence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

    WWF. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

    Intergovernmental Organizations . . . . . . . . . . . . . . . . . . . . . . . . . 32

    Intergovernmental Panel on Climate Change (IPCC) . . . . . 32

    United Nations Principles for Responsible Investment. . . 32

    Government. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

    Environment Canada. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

    Alberta Energy / Alberta Government. . . . . . . . . . . . . . . . . . . 33

    ecoENERGY Carbon Capture and Storage Task Force. . . . 33

    Industry. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

    Associations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

    Private Sector Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

    Public Perceptions of CCS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

    Consolidating Positions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

    Technology Readiness of CCS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

    Well to Refinery: Production of SCO . . . . . . . . . . . . . . . . . . . . 39

    Refinery-to-Tank: Production of Gasoline Oils. . . . . . . . . . . 40

    Tank-to-Wheel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

    Well-to-Wheel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

    Economic Feasibility of CCS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

    Opportunities for CCS in Albertas Oil Sands . . . . . . . . . . . . . . . 42

    Policy Readiness for CCS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

    Monitoring and Verification . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

    Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

    Impact of CCS on Canadas Climate Mitigation Strategy . . . . 43

    Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

    References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

    CONTENTS5. Synthesis and Analysis1. Alberta Oil Sands 3. Carbon Capture and Storage

    2. GHG Emissions from Oil Sands

    4. Perspectives on CCS

    6. Conclusions

    7. References

    C

    ONTENTS

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    An estimated 1.7 to 2.5 trillion barrels of oil are trapped

    in a complex mixture of sand, water and clay.

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    ALBERTA OIL SANDS1.1 Introduction to the Oil Sands

    Albertas oil sands contain the second largest proven reserves of o il in theworld. Albertas proven oil reserves as oil sands that are economicallyrecoverable amount to 173 billion barrels (Alberta Energy, 2008), but estimatesfor bitumen in place are between 1.7 and 2.5 trillion barrels (Oil SandsDiscovery Centre). Unlike conventional crude oil, the oil sands must be minedor recovered in situ. The three regions of deposits Athabasca, Peace River,and Cold Lake comprise a total of 140,200 km2 (refer to Figure 1.1.1-1,

    Alberta Energy, 2009). Bitumen comprises approximately 10-12% of the actualoil sands, while 80-85% is comprised of mineral matter such as sand and clayand 4-6% is comprised of water (Alberta Energy, 2009).

    1.1.1 History and motivation

    The first attempts to develop the Athabasca Oil Sands commercially, from1906 to 1917, were made under the assumption that the bitumen in thearea must be coming from pools of oil deep beneath the surface. The

    Alberta Research Council (ARC) was establ ished in 1921 and supportedearly research on separation of bitumen from sand and a demonstrationproject was carried out during the 1940s and 1950s. It was not until 1962that oil sands development started in earnest, when the Government of

    Alberta announced a policy in which o il sands production would supplement,but not displace, conventional crude oil production in the province. As a result,the Great Canadian Oil Sands (GCOS) Project, ultimately owned by Suncor,came on stream in 1967 to become the worlds first oil sands operation

    (Humphries, 2008).

    Figure 1.1.1-1 Oil Sands Regions in Alberta (Alberta Government, 2006)

    Calgary

    Edmonton

    Fort

    McMurray

    Athabasca

    Project

    Region

    Peace River

    Project

    Region

    Cold Lake

    Project

    Region

    Northern Lights

    Peace River

    Fort McMurray

    Cold Lake

    Frog Lake

    Lindbergh

    Syncrude

    Joslyn Creek

    Horizon

    Aurora

    Fort Hills

    Jackpine

    Firebag

    Muskeg River

    Borealis

    SunriseKearl Lake

    Lewis

    Cadatte Lake

    Seal

    UTF Rover

    MacKay RiverSuncor

    Millennium

    Pelican Lake

    Britnell

    Hanging Stone

    Great Divide

    Meadow Creek

    Long Lake

    Surmount

    Christina Lake (MEG)

    Christina Lake (EnCana)

    Jackfish Creek

    Foster Creek

    Cold Lake

    Tucker Lake

    Caribou

    Kirby

    Wolf Lake / Primerose

    OrionBonnyville

    Beaverdam

    i ii

    i i ll

    il

    i ill i

    CARBON CAPTURE AND STORAGE IN THE ALBERTA OIL SANDS A DANGEROUS MYTH 5

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    CARBON CAPTURE AND STORAGE IN THE ALBERTA OIL SANDS A DANGEROUS MYTH6

    SECTION1:A

    LBERTA

    OIL

    SANDS

    1.1.2 Growth rate

    Production has steadily increased since the first oil sands development, theGCOS project in 1967. According to the Canadian Association of PetroleumProducers, oil sands production accounted for 62% of Albertas total crude oiland equivalent production in 2004. The share is expected to be 87% by 2015,

    with light conventional crude oil production continuing to decline (CAPP, 2009).Figure 1.1.2-1 shows historic production broken down by type of mining whileFigure 1.1.2-2 shows historic production broken down by resulting product.Production in 2008 stood at 1.3 million barrels per day (bpd).

    1.2 Harvesting the Oil Sands

    The Northern Alberta oil sands are considered to be one o f the largestindustrial projects in the world, and consequently, a significant contributorto growing GHG emissions. Oil sands activities can be classified into twotypes of operations: surface mining and in-situ.

    Figure 1.1.2-1 Bitumen Production by Type of Mining Figure 1.1.2-2 Bitumen Production by Product

    1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

    In Situ

    Historical Production of Oil Sands (surface mining vs. in situ)

    Source:Derived from Alberta Energy and Utilities Board ST 39 & ST 53

    Production

    (thousand

    ba

    rrels

    perday)

    1100

    1000

    900

    800

    700

    600

    500

    400

    300

    200

    100

    0

    Mining

    Historical Synthetic Oil Production and Net Crude Bitumen Production

    Source:Alberta Energy and Utilities Board ST 39 & ST 53

    Production

    (thousand

    barrels

    perday)

    1200

    1000

    700

    500

    400

    200

    0

    Net Bitumen

    1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

    Synthetic Oil

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    CARBON CAPTURE AND STORAGE IN THE ALBERTA OIL SANDS A DANGEROUS MYTH 7

    SECTION1:A

    LBERTA

    OIL

    SANDS

    1.2.1 Surface Mining

    In surface mining operations, oil sands are mined using shovel-and-trucktechnology (Figure 1.2.1-1). The oil sands are loaded onto hauler trucks andtransported to crushers. The crushers break down the ore into smaller piecesand the material is turned into a slurry with the addition of hot water. The

    mixture is passed through vibrating screens to separate large particles beforethe addition of air and caustic soda. The resulting slurry is then pumped tothe extraction plant for separation of the coarse tailings from the slurry.

    The main component of the extraction plant is the Primary SeparationVessel (PSV), which produces an overflow stream of bitumen, combinedwith water, clay, and sand fines. This stream, generally referred to as Froth,is further processed in the Froth Treatment Plant. The PSV produces anunderflow stream of water and coarse solids which is pumped to the tailingsponds for recovery of the water for reuse, and deposition of the sand fordyke construction. In the PSV, a middlings layer is extracted and processedthrough a series of aerated flotation cells to recover residual bitumen, whichis combined with the Froth overflow from the PSV. Underflow from the flotationcells, Flot Tails, is either sent to the tailings ponds, or thickened to recover

    heat and water and the thickened tails sent to the tailings ponds.

    In the Froth Treatment Plant, the bitumen is heated and diluted with a solventto facilitate removal of residual water and fine solids. After solids removal,the solvent is recovered from the bitumen. Solvent recovery is a thermalprocess, requiring significant energy inputs, with energy recovered in theFroth Treatment Plant partially used to heat water for the extraction process.

    The bitumen is then processed on-site or sent for processing, pipelined ashot bitumen, or diluted with a lighter hydrocarbon and pipelined as dilutedbitumen or dilbit.

    1.2.2 In-situ Extraction

    The vast majority of Albertas oil sands are buried too deep to al low surface

    mining operations. This oil is recovered by in situ techniques. Steam AssistedGravity Drainage (SAGD) is the most commonly used type of in situ technologywhereby steam is injected into the reservoirs via horizontal injection wells toheat the oil and lower the bitumens viscosity. A parallel producer well collectsthe bitumen and the mixture is transported by pipeline to a centralized facilitywhere the produced water is recovered, treated, turned into steam, andrecycled back to the reservoir. Diluent is delivered to the centralized facilityvia pipeline and is blended with the bitumen. The diluted bitumen (dilbit) isthen transported via pipeline to the upgrading facility. In some cases, a hotbitumen product can be sent directly to the upgrader facility.

    Cyclic Steam Stimulation (CSS) is a technique whereby steam, injected intoa heavy oil reservoir, is shut-in and allowed to soak the formation to mobilizethe cold bitumen. After heating, the flow on the injection well is reversedproducing oil through the same well bore. This cycle of soak-and-produce isrepeated when oil production rates drop below a critical threshold as a resultof the reservoir cooling. The choice between SAGD and CSS depends onreservoir properties including reservoir depth and quality. Generally, in ColdLake and Peace River where reservoirs are deeper, CSS is preferred to SAGD;in Athabasca where oil sands are shallower and there is a lack of a cappingformation, CSS is less viable and SAGD is the preferred production method.

    Figure 1.2.1-1 Oil Sands Mining,

    Photo by David Dodge courtesy of The Pembina Institute,

    (www.OilSandsWatch.org)

    i i l i il i i i

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    CARBON CAPTURE AND STORAGE IN THE ALBERTA OIL SANDS A DANGEROUS MYTH8

    SECTION1:A

    LBERTA

    OIL

    SANDS

    1.2.3 Upgrading

    At the upgrading facility, a series of distill ation systems is used to sort thehydrocarbon into different components and the diluent is also recoveredduring distillation and sent via pipeline back to the extraction facilities. Thebottoms from the vacuum distillation is sent to a hydrocracking unit where

    large hydrocarbons are cracked and recombined with hydrogen to createproducts that can be used to create a high quality synthetic crude. Thecracked oil together with the gas oils is sent to hydrotreating and stabilizationwhere more hydrogen is added to further upgrade the oil and improveits properties. The hydrotreating operation also removes impurities suchas sulphur and nitrogen, producing a sweet oil. The resulting productsare blended to produce a sweet synthetic crude that can be pipelined toa refinery (Figure 1.2.3-1).

    1.2.4 Refining

    Once at the refinery, the SCO undergoes distillation and vacuum distillation tocreate various fuels. The distillate from the crude distillation processes is sentto hydrotreaters and naptha reformers, and distillate from vacuum distillationis sent to a Fluid Catalytic Cracking (FCC) unit. The fuels resulting from refining

    operations include kerosene, diesel, LPG, and various gasoline oils.

    Figure 1.2.3-1 Process steps for recovery of synthetic crude oil from oil sands mining (adapted from Colt Engineering, 2007)

    POWER

    STEAM

    CO2

    HYDROGEN

    DILUTEDBITUMEN ATMOSPHERIC DISTILLATE

    VACUUMDISTILLATE

    SYNTHETICCRUDE

    DEASPHALTEDOIL

    NAPHITHA

    DIESEL

    HEAVY GAS OIL

    DILUENT

    SAND

    SAND

    FUEL GAS

    ATMOSPHERIC BOTTOMS

    VACUUM BOTTOMS

    ASPHALTENE

    Mining &Extraction

    Delayed CokingGasification

    Froth Treatment

    Sand to MineReclamation

    Fines to Storage Cell

    Diluent Recovery

    VacuumDistillation

    SolventDeasphalting

    Hydrocacking /Desulfurization

    , ,

    , ,

    , ,

    , ,

    , ,

    , ,

    , ,

    , ,

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    CARBON CAPTURE AND STORAGE IN THE ALBERTA OIL SANDS A DANGEROUS MYTH 9

    SECTION1:A

    LBERTA

    OIL

    SANDS

    1.3 Production Trends

    Oil sands production has been growing rapidly, driven by rising prices duringthe past several years, although the recent drop in oil prices and increasingcost of labour has temporarily slowed growth forecasts. Projections aretypically based on projects announced, with consideration of project

    schedules, technologies, and stages of development.

    1.3.1 Current Trends

    Approximately C$125 billion in capital expenditures have been publiclyannounced for the period 2006 to 2015; however, since 2008, variouscompanies have withdrawn applications for projects, announced delays, and/or placed their projects on hold pending financial review. A total of 7.0 million

    bpd capacity of existing and proposed operations remains as of February2009, with start-up dates for 5.0 million bpd to be determined. The profileof projects in the various regions of Alberta is shown in Figure 1.3.1-1.Figure 1.3.1-2 shows projected total bitumen production growth fromthe oil sands given different economic scenarios.

    Figure 1.3.1-1 Existing and Proposed Bitumen Producers, February 2009 (Dunbar, February 2009)

    il i i

    Withdrawn

    Suspended

    Announced

    Disclosure

    Application

    Approved

    Construction

    Operating

    Mining

    1,000,000

    1,000,000

    1,000,000

    4,000,000

    Capacity(bpd)

    5,000,000

    6,000,000

    7,000,000

    8,000,000

    N A thabasca S A thabasca

    In Situ

    Cold Lake Peace River Total

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    CARBON CAPTURE AND STORAGE IN THE ALBERTA OIL SANDS A DANGEROUS MYTH10

    SECTION1:A

    LBERTA

    OIL

    SANDS

    1.3.2 The Economics of the Oil Sands

    Oil sands projects, particularly upgraders, are capital intensive andconsequently, the project economics are extremely sensitive to raw materialsand labour costs. The equivalent operating costs for oil sands activities havechanged dramatically over time in terms of real dollars and stated break even

    prices have varied dramatically over the last few years. They are influencedby the pace of growth of the oil sands, global price of oil, and more recentlyby growing environmental concerns reflected in new Low Carbon FuelStandard (LCFS) in California and the Specified Gas Emitters Regulation(SGER) in Alberta.

    The recent period of high commodity prices together with regional labourshortages caused by rapid expansion (Figure 1.3.2-1) increased the requiredbreak even price for oil. The rapid expansion of oil sands projects in Albertahas also added inflationary pressures, increasing engineering, materials,and construction costs for new developments.

    Existing operations are also sensitive to rising energy costs, becausesignificant amounts of natural gas are currently used in the mining andupgrading process. Lower cost alternatives to natural gas are occasionallyemployed while newer technologies that can hedge against future rises inenergy costs are being sought. Gasification of petcoke and other residues,nuclear energy, and geothermal energy sources are current options underinvestigation. Costs of carbon emissions are also a concern, particularlyfor large emitters in Alberta who are subject to the SGER.

    Figure 1.3.1-2 Projected total bitumen production growth

    given different economic scenarios (McColl, February 2009)

    il i l illi i ll

    0

    1

    2

    3

    4

    5

    6

    7

    8

    0

    1

    2

    3

    4

    5

    6

    7

    8

    Portable Production Range

    CERI Unconstrained Projection (2008)

    CERI Reference Case Projection (2008)

    CERI Economic Slowdown Projection

    Bitumen Production Capacity, Million Barrels per Day (mmbpd)

    2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029

    Figure 1.3.2-1 Industrial Construction Projects and Personnel Required

    i i i , illi l

    2

    004-01

    0

    2000

    4000

    6000

    8000

    10000

    12000

    14000

    16000

    18000

    20000

    22000

    24000

    26000

    28000

    3000032000

    34000

    36000

    2

    004-02

    2

    004-03

    2

    004-04

    2

    005-01

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    005-02

    2

    005-03

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    005-04

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    006-01

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    006-02

    2

    006-03

    2

    006-04

    2

    007-01

    2

    007-02

    2

    007-03

    2

    007-04

    2

    008-01

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    008-02

    2

    008-03

    2

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    009-03

    2

    009-04

    2

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    010-04

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    2

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    2

    011-03

    2

    011-04

    2

    012-01

    2

    012-02

    2

    012-03

    2

    012-04

    2

    013-01

    2

    013-02

    2

    013-03

    2

    013-04

    2

    014-01

    2

    014-02

    2

    014-03

    2

    014-04

    2

    015-01

    2

    015-02

    2

    015-03

    2

    015-04

    ConstructionCraftPersonnel

    Total

    >100 MM Cdn (2004Q1 - 2015Q4) Generated 2007-11-16 17:33

    Petro Canada

    Syncrude

    Suncor

    Nexen/OPTI

    CNRL

    Albian

    Fort Hills

    Northwest

    Imperial Oil

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    CARBON CAPTURE AND STORAGE IN THE ALBERTA OIL SANDS A DANGEROUS MYTH 11

    SECTION1:ALBERTA

    OIL

    SANDS

    1.4 Other Environmental Impacts

    While oil sands operations in Alberta are significant contributors to GHGemissions in Canada, it is important to keep in mind that reducing GHGs isonly one part of sustainable development. Oil sands operations in Albertahave had significant adverse environmental and social impacts due to other

    aspects of their operations, such as tailings ponds, air emissions, and landand water usage.

    1.4.1 Emissions to air

    Though GHGs are a frequently area of focus, they are only a portion of theatmospheric emissions that arise from oil sands development and energy use.Many of the other air emissions associated with these activities, such as NOxand SOx, have other effects on plant and animal life, such as the productionof acid rain.

    1.4.2 Land impacts

    Oil sands mining activities disturb large quantities of land, removing it fromuse by wildlife and other activities including as a carbon store through

    standing timber, peatland and wetlands. In-situ activities have fewer visibleland impacts than mining activities, but larger impacts in other areas, includingenergy and solvent use. Studies have additionally shown that characteristicland-disturbances of in-situ site development (seismic lines, access roads,etc.) can have a disproportionately large impact on wildlife such as WoodlandCaribou (Dyer et. al. 2001).

    1.4.3 Water impacts

    Enormous quantities of water, typically drawn from freshwater sources, is usedfor steam production for in-situ production and is used to separate syntheticcrude from bitumen. Significant quantities are consumed and disposed ofwith thicker oil and waste from oil sands activities in tailings ponds (Holroyd &Simieritsch, 2009). Between two and four barrels of water are consumed foreach barrel of synthetic crude oil produced from mining operations, and abouthalf that is consumed for in-situ operations (Griffiths and Woynillowicz, 2009).

    1.4.4 Tailings ponds

    Current mining practices produce a fluids tailings stream that is currentlycontained in tailings ponds covering over 130 square kilometers., Tailingsconsist of water, sand, silt clay, unrecovered hydrocarbons and water withdissolved components. The toxic effects of tailings pond water has been

    documented since the early stages of oil sands development and the toxicityis primarily due to organic acids, particularly napthenic acids. Amongst thecompounds detected in tailings pond water are benzene, toluene, phenol,and polycyclic aromatic hydrocarbons (PAHs); trace metals such as leadand arsenic have also been found in tailings pond water (Allen, 2008). Giventhe toxic composition of tailings, tailings waste must be held and managedon-site. As these resemble natural water sources, they attract birds andwildlife that are trapped in the thick fluid and unable to escape. Leakage fromtailing ponds into the surrounding area has the potential cause further damageto the environment and wildlife if improperly managed (price, 2008). Notailings pond has been reclaimed to date (Grant et. al, 2008) and estimatesof methane generation shown potential for significant emissions and a largeerror margin in current accounting (Siddique et. al., 2008).

    1.4.5 Biodiversity

    Both mining activities and in-situ can destroy and significantly fragmentwildlife habitat, and pipeline infrastructure for carbon transport and storagewill contribute to this problem. Albertas woodland caribou, for example, is anendangered species which studies have shown to be been seriously affectedby industrial activities in the region (Dyer et. al. 2001). Additionally there area large number of under-examined impacts on species health as a result ofoil and gas development activities in general potentially affecting humans(Witter et. al. 2008) as well as aquatic species and wildlife (Lister 2007).

    1.4.6 Indigenous communities

    These environmental impacts are also adversely affecting local indigenous

    communities. A number of First Nations are opposed to the unsustainabledevelopment of the oil sands on this basis. A statement of claim wasfiled in May of 2008 by the Beaver Lake Cree Nation that listed more than17,000 approved or proposed developments in their traditional lands, nearLac La Biche.

    The band claims the developments have forced members out of traditiona lareas, degraded the environment and caused a decline in wildlife, making itimpossible for them to meaningfully exercise their Treaty 6 rights to hunt,trap and fish.

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    The greenhouse gas intensity of oil sands production is on

    average three times greater than for conventional oil.

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    CARBON CAPTURE AND STORAGE IN THE ALBERTA OIL SANDS A DANGEROUS MYTH 13

    GHG EMISSIONSFROM OIL SANDS2.1 Greenhouse Gas Emissions from Oil Sands Operations

    In signing and ratifying the Kyoto Protocol, Canada committed to reduceits emissions to 6% below 1990 levels on average during the period from2008-2012. Canada is way off track to meet that commitment. EnvironmentCanada estimated that total GHG emissions in Canada in 2007, expressedas CO

    2equivalent, (CO

    2e) were 747 Mt, 26% higher than 1990 levels and

    34% higher than the Kyoto target of 558 MT (Figure 2.1-1). According to theIntergovernmental Panel on Climate Change (IPCC), industrialised nationsshould further reduce emissions by between 25 and 40 per cent below 1990levels by 2020, and 80 to 90 per cent by 2050 (IPCC, 4th Assessment Report,Working Group III Report Mitigation of Climate Change, 2007, p. 776).

    Extraction of oil from the oil sands is an energy intensive process. Conse-quently, some of the largest emitters of greenhouse gases are companiesinvolved in oil sands operations. The oil sands mining operations of Syncrudeand Suncor are Canadas 3rd and 6th largest emitters of GHGs, respectively.Between 1990 and 2003, the average emission intensity for producing oilfrom oil sands operations declined by 23%, largely as a result of decliningemissions associated with fossil fuel combustion. While the greenhouse gasintensity of oil sands production has been declining, the cumulative emissionsfrom the industry have been increasing, due to the rapid expansion of oilsands activities. Between 1990 and 2006, bitumen and SCO production fromoil sands operations increased by about 230% (Environment Canada,November 2008). Expansion plans for oil sand operations involve deeperand more difficult to access reserves and include an increased proportion

    of in-situ operations, from 40% of the 1.7 million bpd in production capacityin 2009 to 52% of the proposed 7.0 million bpd capacity (Strategy West,February 2009). In-situ operations as currently operated are more carbonintensive than surface mining and as a result, the greenhouse gas intensityof oil sands production may begin to rise again.

    Figure 2.1-2 Canadas Greenhouse Gas Emissions 1990-2007 (Environment Canada)

    .

    KyotoCommitment Period

    (2008-2012)

    Kyoto Target: 6% below 1990 Baseline

    GHCEmiss

    ions(MtCO

    2

    eq)

    1990

    500

    600

    650

    700

    750

    800

    850

    1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

    602 604

    624 642

    659

    672678 691

    717 711717

    741

    741731

    718

    747

    585

    2007 Emissions 747 Mt26.2% above 1990

    33.8% above Kyoto Target

    558.4Mt

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    CARBON CAPTURE AND STORAGE IN THE ALBERTA OIL SANDS A DANGEROUS MYTH14

    SECTION2:GHGEMISSIONS

    FROMOIL

    SAND

    S

    Figure 2.1-2 shows the various activities from which GHG emissions arisefrom a life cycle basis. A life-cycle basis considers all direct and indirectemissions from extraction at the well to combustion of the final transportationfuel, and is often referred to as a Well-to-Wheels assessment. From a lifecycle perspective, the most significant source of greenhouse gas emissionsfrom oil sands processes are fuel combustion associated with power

    generation, extraction, upgrading and refining and combustion of theresulting fossil fuel products by downstream users.

    2.2 Review of LCA Studies

    There are relative ly few lif e cycle ana lyses of oi l sands opera tions that havebeen completed. Understanding greenhouse gas emissions from a life cycleanalysis is critical to assessing where opportunities for carbon capture andstorage exist and how significant an impact carbon capture and storagecan have on overall GHG emissions.

    2.2.1 GHG Emissions from Construction

    Very few studies have characterised GHG emissions associated with theconstruction of new facilities. These emissions are typically neglected inLCA studies for energy facilities as they are often an order of magnitude lowerthan emissions associated with fuel combustion. Bergerson and Keith (2008)suggest that for oil sands operations, GHG emissions from construction aresignificant and may comprise an additional 10% of total life-cycle emissions.Details about the methods used to estimate emissions from construction arenot provided in their study, however and would be required for further inclusion.

    2.2.2 Well-to-Upgrader: Production of Bitumen

    Mining and Extraction Surface Mining

    During the mining stage, greenhouse gas emissions are largely associatedwith diesel fuel consumption for trucks to transport mined material fromthe mine site to processing area. The shovels used for extraction areprimarily electric and either use grid power or power generated on-site.In the bitumen extraction stage, hot water and steam is used to separatethe bitumen from the oil sand. Energy demands include electricity for

    equipment and hydrotransport as well as energy to produce heat. GHGemissions are also associated with surface mining tailings ponds and alarge part of surface mining operations involves clearing of boreal ecosystems,the effects of which are largely unaccounted in emissions data.

    Figure 2.1-2 Life Cycle Activities for GHG Emissions

    On-Site Activites

    Off-Site Activites

    Extraction Upgrading

    Refining

    Transportationto Refinery

    ProductDistribution

    Off-site FuelCombustion

    Decommissioning

    UpstreamExtraction and

    Processing

    Fuel

    Transportation

    Power Production

    Construction

    .

    .

    CARBON CAPTURE AND STORAGE IN THE ALBERTA OIL SANDS A DANGEROUS MYTH 15

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    CARBON CAPTURE AND STORAGE IN THE ALBERTA OIL SANDS A DANGEROUS MYTH 15

    SECTION2:GHGEMISSIONS

    FROMOIL

    SAND

    S

    Extraction In Situ

    The main sources of greenhouse gas emissions during in situ extract ion arisefrom fossil fuel combustion for the production of steam. Steam is typicallyproduced using natural gas in steam boilers, and the steam-to-oil ratio, anindicator of efficiency of the operation, is typically between 2 and 3. Electricityand transportation fuels are also required for equipment operation.

    In a report published by The Pembina Institute in 2008 (Dyer, 2008), surveyswere sent to oil sands production companies with both mining and in situoperations requesting information on selected environmental performanceindicators. One of these indicators was the greenhouse gas intensity for oilsands production of bitumen (i.e. before upgrading). The question askedof participating companies was: What is your operational greenhouse gasemission intensity in kilograms (kg) per barrel (bbl) bitumen? Responses wereonly received for mining activities and reported intensities between 23 and 45kg CO

    2eq/bbl bitumen. In situ operations tend to have higher greenhouse gas

    intensity for extraction of bitumen. More significantly, based on data reportedto Alberta Environment as part of the specified gas reporting regulation to

    regulate greenhouse gas emissions from large industrial sources together withproduction data, in-situ operations resulted in between 34 and 115 kg CO

    2e/

    bbl bitumen, with CSS operations being more intensive than SAGD operations(Alberta Environment, 2007).

    2.2.3 Upgrader-to-Refinery: Production of SCO from Bitumen

    During upgrading, energy consumption is significant. Large amounts ofhydrogen, steam and power are required for the upgrading processes.Significant amounts of natural gas are used to create hydrogen. Hydrogenis purified using a solvent or using pressure swing adsorption (PSA). Thecarbon dioxide produced as a by-product is typically vented as a nearlypure CO

    2stream to atmosphere in solvent systems, or is released as part

    of the flue gases from the combustion of the PSA tail gas. Greenhouse gasemissions are also associated with venting, flaring and fugitive releases. In2007, Ordorica-Garcia et al modeled the energy demands and greenhousegas emissions of the Canadian oil sands industry. Amongst the scenariosreviewed were surfacing mining with LC Fining (Chevrons technique to treatheavy hydrocarbons with hydrogen in the presence of catalyst to produce

    Figure 2.2.3-1 GHG Intensity per Process Stage (Ordorica-Garcia et al, 2007).

    Scenarios reviewed were: A1 Surface mining with LC Fining, Fluid Cracking, and Hydrotreating;

    A2 Surface mining with bitumen upgraded by delayed coking and hydrotr eating;

    A3 Surface mining with upgrading by LC Fining and hydotreating; and C SAGD bitumen production without any upgrading.

    0.00 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09 0.10

    TONNE CO2EQ/BBL

    0.0374C

    0.0873A3

    0.0808A2

    0.0832A1

    Upgradi ng Ext racti on H ydrotransport Mini ng Balance of pl ant SAG D

    :

    ..

    .

    CARBON CAPTURE AND STORAGE IN THE ALBERTA OIL SANDS A DANGEROUS MYTH16

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    CARBON CAPTURE AND STORAGE IN THE ALBERTA OIL SANDS A DANGEROUS MYTH16

    SECTION2:GHGEMISSIONS

    FROMOIL

    SAND

    S

    low sulfur products), FC (Fluid Coking where heat is employed rather thanhydrogen for the cracking process), and Hydrotreating (A1), surface miningwith bitumen upgrading by delayed coking and hydrotreating (A2), and surfacemining with bitumen upgrading by LC Fining and hydrotreating (A3). The studyalso looked at a scenario for SAGD bitumen production without any upgrading(C). The results, reproduced in Figure 2.2.3-1, show that upgrading accounts

    for the vast portion of the greenhouse gases released from Well-to-Refineryin the production of SCO from surface mining operations. Upgrading typicallyemits between 50 and 70 kg CO

    2/bbl SCO and accounts for be tween 65%

    and 85% of total GHG emissions in the production of SCO (Ordorica-Garciaet al, 2007).

    Charpentieret al(2009) recently reviewed publicly available studies andmodels that estimate greenhouse gas emissions from oil sands activities.

    Their study a imed to provide a comprehensive review of past studies andcurrent models; to highlight differences in emissions performances andelucidate possible causes of these differences; and to provide guidance forfuture studies. Figure 2.2.3-2 shows the emissions intensity from wellheadto the refinery entrance gate for synthetic crude oil production.

    Variations are sign ificant and some of the studies analyzed have quite differentresults, even for the same project or combination of projects. For the in situoperations, differences may be due in part to different steam-oil-ratios (SORs)assumed for each study or project. Steam production typically uses naturalgas combustion, and the fuel combustion required to produce steam forSAGD operations accounts for the major part of GHG emissions.

    The sustainability reports from the major industry players reveal similarnumbers within the range found by Charpentier et al., Syncrudes 2007Sustainability Report for example showed 133 kg CO

    2eq/bbl of SCO

    production. Figure 2.2.3-2 shows surface mining and upgrading emissionsvary from 60-155 kg CO

    2/bbl SCO and in-situ and upgrading emissions vary

    from 118-178 kg CO2/bbl SCO. For comparison, conventional oil emissions

    are reported to vary from 27-58 kg CO2/bbl by Charpentier et. al.

    Figure 2.2.3-2 Emissions Intensity of SCO Production (Charpentier et al, 2009)

    . .

    .

    kgCO

    2eq/bblSCOorcru

    de

    180

    160

    140

    120

    100

    80

    60

    40

    20

    0

    200

    CAPP

    Flint

    GHGenius

    GREET

    McCan

    ninFlint

    M

    cCulloch

    O-GLCF

    O-GDC

    O-G

    LCF+FC

    ShellAOSP

    Suncor

    Syncrude

    B&Flow

    Fur

    imskyDC

    FurimskyFC+H

    Flint

    GHGenius

    GREET

    M

    cCulloch

    McCan

    ninFlint

    GHGenius

    Surface Mining & UpgradingIn Silo&Upgrading Conv. Oil

    CARBON CAPTURE AND STORAGE IN THE ALBERTA OIL SANDS A DANGEROUS MYTH 17

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    CARBON CAPTURE AND STORAGE IN THE ALBERTA OIL SANDS A DANGEROUS MYTH 17

    SECTION2:GHGEMISSIONS

    FROMOIL

    SAND

    S

    2.2.4 Refinery-to-Tank: Production of Gasoline Oils from SCO

    The distill ation and hydrotreating processes involved in refining SCO requireheat sources, electrical power, and hydrogen production. The greenhouse gasintensity of refining operations depends on the quality of the crude oil beingreceived at the entrance gate of the refinery. Refinery operations may accountfor 30-80 kg CO

    2

    eq/bbl crude.

    2.2.5 Tank-to-Wheels: Use of Gasoline in Transportation

    The average heat content o f crude oil i s 5.8 MMBtu/bbl (compared to theheating value of a barrel of gasoline which is approximately 4.8 MMBtu)and the average carbon coefficient is 20.33 kg C per MMBtu. Given this, theCO

    2emissions associated with combusting one barrel of oil is approximately

    430 kg. Most studies assume that CO2emissions associated with end user

    consumption is between 350 and 450 kg CO2eq/bbl transportation fuel.

    2.2.6 Summary of Emissions: Well-to-Tank and Well-to-Wheel

    The numbers described in prev ious sections cannot be di rectly summedbecause the results are not expressed on an equal basis, and reflect thedifferent products (bitumen, SCO, transportation fuel) across the stages.

    A summary of l ife-cycle emissions for gasoline fue l on a Well-to-Tank basisis shown in Figure 2.2.6-1, reproduced from National Energy TechnologyLaboratorys evaluation of life cycle greenhouse gas emissions for importedcrude oils.

    Production of fuels from the Canadian Oil Sands is significantly more carbonintensive than production of fuels from any other feedstock. EnvironmentCanadas National Inventory Report on Greenhouse Gas Sources and Sinksin Canada 1990-2007, found that oil sands mining, extraction and upgradingactivities were about 1.7 times more GHG-intensive than conventional oilproduction in 2007 (Environment Canada, 2009).

    However, of the 13 studies used by Charpentier et al., only GREET (2008)and GHGenius (2008) compared emissions from all three categories and bothfound much higher GHG intensities. GREET found surface mining to be twiceas carbon intensive as conventional oil and in-situ to be 3 times as intensive.GHGenius found surface mining and in-situ to be 3 and 3.5 times as carbonintensive respectively. These figures are supported by a 2005 PembinaInstitute study, which found well to refinery emissions from oil sands to beon average 3 times more carbon intensive than the average for conventionaloil. A 2008 RAND Corporation report found them to be between 2.4 to 4.1times more carbon intensive depending upon the method of extraction.

    While Well-to-Tank emission for conventional oil accounts for approximately20% of total Well-to-Wheels GHG emissions, for Canadian Oil Sands,Well-to-Tank emissions account for approximately 30% of total Well-to-Wheelsemissions (Figure 2.2.6-2). On a Well-to-Wheel basis, several studies haveestimated that transport fuels derived from oil sands are between 14 per centand 40 per cent more GHG-intensive than conventional oil.

    2.2.7 Export Upgrading / Export Refining

    Bitumen is increasingly being sent to the United States where there is a muchgreater upgrading and refining capacity for heavy oil. This trend is supportedby Statistics Canada which shows a 28% increase between 2003 and 2006in the ratio of bitumen to synthetic crude oil production (Environment Canada,2008). With many of the new projects being shelved until favourable marketconditions return, one of the worries in the oil sector is that capacity in theUS will be used to meet demands for upgrading and refining. While exportingactivities to the US would lower GHG emissions on record in Canada, froma life cycle perspective, there is no net benefit the emissions will still ariseand will need to be dealt with.

    Figure 2.2.6-1 Well-to-Tank CO2

    Emissions (NETL, 2009)

    0.0

    5.0

    10.0

    15.0

    20.0

    25.0

    30.0

    35.0

    40.0

    kgCO

    2e/MMBTULHVdiesel

    FEEDSTOCK SOURCE

    Crude Oil Extraction and Pre-ProcessingCrude Oil Transport

    Diesel Refining OperationsFinished Fuel Transport

    Cana

    daOilS

    ands

    Vene

    zuela

    Bitum

    en

    Vene

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    nal

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    .

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    :

    :

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    The cost of applying CCS to oil sands developments is high and

    does not compare favourably with capturing emissions from highly

    concentrated sources such as coal fired power stations.

    CARBON CAPTURE AND STORAGE IN THE ALBERTA OIL SANDS A DANGEROUS MYTH 19

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    CARBON CAPTUREAND STORAGE

    3.1 Carbon Capture

    The greatest opportunity for carbon capture and storage (CCS) is at largepoint sources. There are four types of systems for carbon capture: capturefrom industrial process streams, capture from pre-combustion processes,capture from post-combustion processes, and capture from oxy-fuelcombustion processes.

    3.1.1 Types of Systems

    Process Stream

    Raw natural gas contains small amounts of CO2and this CO

    2together

    with H2S is normally removed during the gas sweetening process. The

    most common gas sweetening operations use amine to absorb CO 2and H2Sat high pressure, and regenerate the amine solution at low pressure andhigh temperature. In response to environmental regulations, these acid gascomponents released from regenerated absorbents have been compressedand injected in deep wells. Separation of acid components from natural gasstreams is a well-established technology with a long history.

    Pre-combustion

    Pre-combustion capture of CO2would involve capturing the CO

    2from

    a synthesis gas (syngas) stream. Such a stream may be produced, forexample, from the gasification of heavy oils or coal. Steam reforming ofmethane is the most common method of producing hydrogen and normallydone in the production of hydrogen. The process involves first a partial

    oxidation reaction to create carbon monoxide and hydrogen, followed bya water gas shift reaction to convert carbon monoxide to carbon dioxide,as shown below.

    CH4+ O

    2 CO + 2H

    2

    CO + H2O CO

    2+ H

    2

    The initial reaction is endothermic and typically occurs in the 800C to 900Crange with the addition of a catalyst. The gas is then cooled and the wasteheat it gives up is used to generate steam which is sent to the shift reactor.Hydrogen is subsequently separated from the carbon dioxide in the cooledgas; in older hydrogen plants the CO

    2is most commonly removed using an

    amine solvent or hot potassium carbonate. For the most part a nearly purestream CO

    2has typically been rejected to the atmosphere. In more modern

    plants, pressure swing adsorption (PSA) is used for the recovery of H 2. Inthese systems, the CO2is in the regeneration stream together with some

    CH4 and H2. This regeneration stream is often then used as a fuel in the

    reformer and after combustion the CO2is vented to atmosphere with the flue

    gas from the reformer. Pre-combustion capture of CO2is largely discussed in

    the context of integrated gasification combined cycles (IGCC), and referencesystems exist for CCS in IGCC plants.

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    Oxy-fuel

    An alternati ve to pre-combustion conditioning of the fuel is to condition thecombustion environment. In oxy-fuel combustion, an enriched or nearly purestream of oxygen is used rather than air in the combustion process. Theelimination of nitrogen from the system reduces gas volumes, and results ina flue gas that is comprised mainly of CO

    2and H

    2O. Combustion in a pure

    oxygen environment results in much higher flame temperatures and conse-quently, CO

    2and/or H

    2O-rich flue gas is recycled to the combustion system

    to moderate temperature. Pure oxygen streams are normally produced bycryogenic separation of air, although new membrane and chemical systemsare being developed that could reduce energy costs associated withproducing a pure oxygen stream.

    Post combustion

    Flue gases containing CO2are referred to as post-combustion streams.

    These low concentration streams (

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    3.1.2 Separation Technologies

    Liquid Solvents

    The most common method of CO2separation is through the use of liquid

    solvents, for either physical or chemical processes. In the case of physicalsolvents, organic liquids absorb CO

    2at high pressure and low or ambient

    temperatures. The solvent is typically regenerated by flashing to atmosphericor vacuum pressures. In some cases strip gas or heat with reflux can beused for regeneration. In the case of chemical solvents, the CO

    2undergoes

    a chemical reaction to form a weak salt in solution. The reaction is exothermic

    and is reversed with heat and low pressure. The circulation rate of the liquidabsorbent typically varies directly with the amount of CO

    2being captured.

    A higher amount of CO2consequently results in more energy required for

    regeneration of the absorbent, and this adds a significant energy cost andenergy efficiency penalty to a facility. As much as 70% to 80% of operationalcosts can arise due to solvent regeneration (Veawab, 2001). In order to be

    efficient, liquid absorbents must be able to operate under high CO 2loadingconditions and through many cycles without degenerating. Typical solventsfor pre-combustion and post-combustion capture of CO

    2are shown

    Tables 3.1.2-1 and 3.1.2-2.

    Table 3.1.2-1 Physical and Chemical Processes for Removal of CO2from Synthesis Gases (adapted from Maxwell, 2004)

    Table 3.1.2-2 Solvents Used for Postcombustion Removal of CO2

    PARAMETER MEA ECONOAMINETM KS-1, KS-2, KS-3

    TYPE Chemical Solvent Chemical Solvent Chemical Solvent

    CHEMICAL 15-20% MEA 30% MEA with inhibitor to resist corrosion Sterically-hindered amines

    VENDOR

    LARGEST CAPACITY

    Kerr-McGee/ABB Lummus

    800 tCO2/d

    Fluor Daniel 320 tCO2/d

    Florida Power and Light

    Gas Turbine Flue Gas

    (2.8-3.1% CO2, 13% O

    2)

    KEPCO/Mitsubishi

    200 tCO2/d

    REBOILER DUTY180-251 MJ/kmol CO

    2

    (4100-5700 kJ/kg CO2)

    143 MJ/kmol CO2

    (3245 kJ/kg CO2)

    144 MJ/kmol CO2

    (3265 kJ/kg CO2)

    PROCESS TYPE CHEMICAL REGENERATION

    HEAT REQUIREMENTS

    OPERATING PRESSURES

    (PHYSICAL SOLVENTS)

    CO2SOLUBILITY@1ATM,

    75OF CC GAS/CC SOLVENT

    aMDEA Chemical Activated Methyl Diethanolamine 42.5 (Two-Stage Regeneration) N/A

    BENFIELD Chemical Hot Potassium Carbonate 63-107 MJ/kmol CO2 N/A

    PRESSURIZED WASHING Chemica l Monoethanolamine (MEA) or D ig lyco lamine (DGA) 88-209 MJ/kmol CO2for MEA N/A

    FLUOR SOLVENT Physical Propylene Carbonate Pressure Only 850-1000 psi 3.3

    PURISOL PROCESS Physical N-Methyl-2-Pyrrolidone (NMP) Pressure Only 1000 psi 3.8

    RECTISOL Physical Low Temperature Methanol Pressure Only 400-1000 psi

    SELEXOL Physical Dimethyl Ethers of Polyethylene Glycol (DMPEG) Flashing or Stripping (Uses Reboiler) 300-2000 psi 3.6

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    Figure 3.1.2-1 shows a matrix for the selection of processes for CO2removal.

    Because of the low pressure of post-combustion streams, chemical solventsare more appropriate than physical solvents for flue gases. At low pressures,chemical solvents are required to capture CO

    2. Table 3.1.2-1 and Table 3.1.2-2

    also show the significantly higher energy cost associated with capture CO2

    from low pressure flue gas streams compared to process streams.

    Solid Sorbents

    Systems using solid sorbents are usually comprised of a packed bedcontaining the solid sorbent. The gas stream flows through the bed and thesorbent is loaded with CO

    2. The sorbent is regenerated with heat and/or

    by reducing pressure.

    Membranes

    Membrane technology uses pressure differentials to separate gases through apermeable surface. In order to operate effectively, membrane systems typicallyrequire high-pressure streams. Polymeric, metallic, and ceramic materials mayhave applications in separating CO

    2from H

    2in syngas streams or from other

    process streams. However, membrane technology is known to be expensive

    and much of the work on membrane systems for CO2separation is still inthe R&D stage.

    Cryogenic Processes

    Cryogenic separations are done through extractive distillation with hydro-carbons. The Ryan-Holmes process is a commonly used means of separatingCO

    2from natural gas components.

    Figure 3.1.2-1 Selection of Process for CO2Removal (Faulkner, 2006)

    , ,

    Physical SolventHybrid

    Physical solvent,hybrid, or hot

    potassium carbonate

    Physical Solvent or activated hot potassium carbonate

    Activated hot potassium carbonate or amine

    Partial pressure of acid gas in product, psia

    10-1100

    101

    102

    103

    100 101 102

    Partialpressure

    ofacid

    gas

    inf

    eed,

    psia

    Lineo

    fequ

    alinl

    etando

    utlet

    press

    ures

    Amine

    Activated hot potassium carbonateor inhibited concentrated amine

    CARBON CAPTURE AND STORAGE IN THE ALBERTA OIL SANDS A DANGEROUS MYTH 23

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    Impact of Process Parameters

    Operating parameters of a facility can have an impact on the technicaland economic feasibility of carbon capture and storage systems.

    Gas Flowrate The gas flowrate determines the size of the absorber,which represents a significant portion of the capital cost of a recovery system.Carbon capture technologies can be applied to relatively large, continuousemission sources. Fugitive emissions and small venting streams do not havean adequate flowrate to warrant the capital and operating costs that would beassociated with capturing CO

    2. Further, compressing small streams to pipeline

    or injection pressure can be costly from a financial and an energy perspective.

    CO2Partial Pressure The partial pressure impacts the choice of solvent

    and the efficiency of solvent loading. Many of the sorbents currently beingused in industry for CO

    2removal (e.g. amines, molecular sieves, physical

    solvents) operate at high pressure. The rich sorbents loaded with CO2are

    subsequently regenerated by reducing pressure and adding heat. The abilityto use the differing equilibrium properties between a high pressure and lowpressure system makes many of the sorbents much more efficient for CO

    2

    capture at high pressure than at low pressure.

    CO2Removal The specification for amount of CO

    2removed can have a

    significant impact on the selection of the technology. Requirements for higherrecovery (i.e. lower concentrations remaining) correspond to taller absorptioncolumns and higher energy penalties.

    3.1.3 Transmission

    Subsurface storage of CO2typically occurs at depths greater than 800 m. CO2separated from process or flue gas streams, therefore, must be compressednot only for transmission, but also for subsurface injection. Given the depthsat which CO

    2is stored, it is compressed into its supercritical or dense phase.

    Depending on the distances to be transported and terrain, repumping andcompression stations may be required enroute, incurring further energypenalties (McCoy, 2005). Trials combining CO

    2as a transport medium for

    other value added products are currently underway (PTAC, 2009) and havethe potential to reduce transportation costs.

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    3.2 Carbon Storage

    3.2.1 Criteria for Carbon Storage

    No full scale integrated CCS system yet exists in connection with oil sandsdevelopments. The technology, and even the science, is at a very early stage.However, research is ongoing and various options are being considered, as

    outlined below.Though the terms storage and sequestration are at times used interchangeably,more accurate is to differentiate on the basis of whether the CO

    2is fixed on a

    permanent basis, for example by reaction into a mineral form, rather thanstored often in a gaseous or liquid state with consequent larger potential forleakage (Griffiths, 2005). When estimating CO

    2emissions avoided, it is further

    necessary to differentiate that amount from the amount captured, as theserepresent different amounts due to the energy consumption of the CCSstages, shown in Figure 3.2.1-1.

    3.2.2 Terrestrial/geological

    Underground storage of carbon dioxide has some history as a result of a largenumber of acid gas projects and projects for enhanced oil recovery (EOR).

    The concept as a greenhouse gas mitigation strategy was first proposed in the1970s, but it was only in the early 1990s that focused research was pursued.

    Theoretically, if the CO2is injected below low-permeability structures, theCO2is physically trapped stratographically and structurally. Once injected into

    reservoir rock, CO2permeates, displacing some of the original fluid, conversely,

    the use of CO2injection can boost production, extend the production life of

    an oil and gas reservoir and create GHG emissions anew. Research exists tosuggest that CO

    2injected into semi-depleted oil and gas reservoirs can be

    retained at a rate of 20-67% with the remaining CO2emerging from the well

    with co-products from which it can be separated and recycled with only anenergy penalty. However, monitoring over time has been extremely limitedgiven the need for CO

    2to be sequestered for at least decades.

    Figure 3.2.1-1 CO2Captured and Avoided (Griffiths, 2005)

    , , ,

    ,,

    ,

    CO2PRODUCED (KG/KWH)

    Emitted Captured

    ReferencePlant

    Capture

    Plant

    CO2avoided

    CO2captured

    0 0.2 0.4 0.6 0.8 1

    CARBON CAPTURE AND STORAGE IN THE ALBERTA OIL SANDS A DANGEROUS MYTH 25

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    As EOR has the potential to increase net a tmospheric carbon emissionsbecause of improved recovery of fossil-fuels in addition to relatively highleakage rates, EOR is often not considered sequestration. But, as EOR mayreduce land disturbances when compared to new explorations. As EOR istypically the lowest cost option (discussed in more detail later) it can contributeto decreasing research and development costs for all potential future usersof CCS, including biomass sources.

    The EOR market is relatively small compared to the total volume of capturableCO

    2in western Canada, so other storage options are needed. The total size

    of the EOR market depends on many factors (including the price of CO2and

    the price of oil) but preliminary estimates indicate that 450 Mt of capacity maybe currently available. This equates to less than 10 Mt/year of storage for 50years (Bachu in ecoEnergy, 2008), and oil sands operational emissions couldbe in the region of 127 to 140 Mt/year as early as 2020. It is claimed that theWestern Canada Sedimentary Basin (WCSB) has a significant potential forcarbon storage. Basin suitability and sources of CO

    2emissions are shown in

    Figure 3.2-1.

    3.2.3 Aquifer

    Deep saline aquifers are considered the most plausible long-term storagelocations for compressed CO

    2by oil sands developers. Theoretically, CO

    2

    injected into deep saline aquifers will be trapped hydrodynamically. Someof the CO

    2will dissolve, but the rest forms a plume that lies at the top of

    the aquifer: in typical aquifer storage conditions (greater than 1000 m), the

    density of CO2will be about two-thirds that of brine, which means thatthe CO

    2would be buoyant and a driving force for escape would exist.

    3.2.4 Solid

    Solid sequestration of CO2, also known as mineral carbonation or mineral

    sequestration, involves the reaction of carbon dioxide with metal oxide to forminsoluble carbonates. The most attractive metals for mineral carbonization arecalcium and magnesium. Solid sequestration can occur as an ex situ chemicalprocess or an in situ process involving CO

    2 injection in geological formations

    rich with silicate or in alkaline aquifers. The technology for mineral carbonationis still in the early stages of development (IPCC, 2005).

    Figure 3.2-1 Basin Suitability and Sources for CCS (Reynen, 2008)

    , , ,

    ,,

    ,

    ,

    Major CO2Sources in the Western Canada Sedimentary Basin

    Source:Bachu and Steward, 2002

    NORTHWEST TERRITORIES

    SASKATCHEWAN

    ALBERTA

    BRITISH

    COLUMBIA

    MANITOBA

    SourcesUS

    Basin Suitability

    Not suitable

    LimitedGood

    Very good

    SouthwesternRegion

    Nor

    thern

    InnerReg

    ion

    E

    dgeofthedeform

    edbelt

    BasinBoundary Precambrian

    Shield

    SoutheasternInner Region

    Southern Region

    CentralInner

    Region

    Northwestern

    Region

    Power Generation

    Oil SandsPetrochemical

    Gas Processing

    Refinery or Upgrader

    Pipeline CompressorCement or Lime

    Newsprint or Pulp Mill

    0 100 200 300 km

    200 mi1000

    . . .

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    3.2.5 Tailings ponds

    Carbon dioxide could both reduce the amount of calcium required for theconsolidation process and at the same time scavenge excess calcium as acalcite precipitate. The consolidated tailings (CT) process (commercialized atSuncor) involves the transfer of mature fine tailings (MFT), addition of gypsum,and mixing with coarse tailings to create a material, which can be eventually

    reclaimed as a soil. During transfer of MFT, bubbling CO2could be used toextract residual bitumen from the MFT, while absorption of CO

    2in the MFT

    would result in favourable properties relative to CT production.

    This manipu lation of the MFT properties using CO2could result in a reduction

    of the gypsum requirement and ultimately reduce the ionic loading in therecycle water to the extraction process. Total CO

    2capture is approximately

    100X greater for preliminary trials and depending upon the rate at whichphysically sequestered CO

    2becomes chemically sequestered as carbonate

    and bicarbonate, these results suggest that chemical sequestration wouldbe at a minimum 1200t/Mt for a conventional CT deposit (R, D&D ProjectDatabase). It should be note that this concept is still in the very early stagesof development.

    Table 3.2.6-1 Proposed Screening Criteria for CO2-EOR and CO

    2Sequestration (Kovscek, 2002)

    PARAMETER POSITIVE INDICATORS DESCRIPTION

    RESERVOIR PROPERTIES

    Average oil satur ation (S) and porosity (), S > 0.05Reflective of the oil remaining per volume of a rock. The larger this factor,

    the more attractive the project due to the volume of oil in place.

    Average permeabi lity (k) and thicknes s

    of the oil-bearing zone (h), kh> 10-14-10-13 Amount of oil a well can deliver is proportional to this factor

    Pre pressure gradient (kPa/m) < 17.4

    Injection of CO2should be controlled so the pore pressure does not exceed

    approximately this value. Reservoirs containing hydrocarbons to be economic have

    a pore pressure gradient less than this; used as an indicator of potential for leakage

    Location Divergent basinConvergent basis are subject to plate convergence and subduction, and hence

    earthquakes. Divergent basis are generally associated with more stable tectonics

    Seals Adequate characterization of caprock, minimal formation damage Avoid areas prone to fault slippage

    OIL PROPERTIES

    Density > 22900 Most efficient production of oil by EOR comes from miscible displacement of light oils

    Viscosity < 5 Most efficient production of oil by EOR comes from miscible displacement of light oils

    Composition High concentration of C5-C

    12, relatively few aromatics Promotes miscibility of oil and CO

    2

    SURFACE FACILITIES

    Corrosion CO2c an be sepa ra ted t o 90% pu ri ty in cost ef fe ct ive man ne r E conomic p aramet er

    Pipelines Anthropogenic CO2source is within 500 km of a CO

    2pipeline or oil filed. Economic parameter

    Synergy Preexisting oil production and surface facilities expertise Economic parameter

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    3.2.6 Oceanic

    Oceanic storage of CO2involves injection directly into the ocean or on the

    sea floor. Below a depth of 3 km, CO2is denser than sea water. Over the past

    200 years, oceans have taken up approximately 40% of total anthropogenicCO

    2emissions, and because the CO

    2resides in the upper ocean, it has

    resulted in a decrease in pH of about 0.1 at the ocean surface (IPCC, 2005).

    Little is known regarding the CO2impacts on marine organisms or the

    ecosystem. Experiments have shown that marine organisms are adverselyimpacted by added CO

    2, and studies on organisms living near the ocean

    surface have shown lower rates of calcification, reproduction, growth,circulatory oxygen supply and mobility, and increased mortality; in somecases, these effects are seen in response to small increases in CO

    2(IPCC,

    2005). Given the requirement to be proximal to oceanic shores, oceanicsequestration of CO

    2is not likely to be pursued for oil sands operations.

    Table 3.2.6-1 shows facto rs that must be considered prio r to pursuing CCSfor enhanced oil recovery and for sequestration.

    3.2.7 Stability and Impact of Carbon Storage

    The Weyburn OilfieldThe Weyburn O ilfield is the largest geological CO

    2storage project and has

    been studied by various research groups, including the International EnergyAgency. Research has looked at long-term safety and performance of CO

    2

    storage; definition of baseline hydrogeological and hydrochemical conditions;and changes resulting from CO

    2injection.

    Initial data has shown that CO2injection in Midale beds led to rapid reactions

    with carbonate dissolution, and some precipitation of gypsum. Three CO2

    flooding experiments were completed on Midale Marly samples. Sampleporosity and gas permeability increased while calcite and dolomite underwentsignificant corrosion and some disintegration was observed. Microseismicmonitoring has been completed, and microseismic events were recorded

    with the microseismicity being possibly related to small fractures producedby injection driven fluid migration within reservoir. No evidence has beenobserved so far of any leaks of injected CO

    2at surface (Riding, 2006), although

    it has to be noted that the research project only commenced in 2000.

    Other large projects

    Other large projects globally include the In Salah CCS project in Algeria

    where approximately 1 Mt/year of carbon dioxide from a natural gas streamis re-injected, and two deep sea projects in Norway that inject into deepformations under the sea.

    WEYBURN SEQUESTRATION PROJECT

    The Weyburn oilfield began operation in 1954 and produced about18,200 barrels per day. The field comprises 10% of EnCanas oilproduction. In 2000, EnCana agreed to use the Weyburn field as ademonstration project for CO

    2 storage and enhanced oil recovery.

    Approximately 6000 tpd of CO2, produced from a synfuels plant in

    North Dakota is transported via a 325 km pipeline to the Weyburnfield for enhanced oil recovery, and production has been boostedby 25%. The Weyburn Project is the worlds largest geological CO

    2

    storage project and is studied intensively by the International EnergyAgency. Phase I of the project (2000-2004) focused on proving theability to store CO

    2over the long-term and demonstrating predictive,

    monitoring, and verification techniques. Phase II of the project (2005-2010) is focused on developing an understanding of oil wellboreintegrity over hundreds of years of CO

    2 storage and developing

    practical protocols to guide implementation of CCS projects. Phase IIwill also develop a Best Practices Manual for site selection, monitoringand verification, wellbore integrity, and performance assessment, andinform the development of regulatory and policy frameworks.

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    * CO2injection for EOR is a mature market technology, but when this technology is used for CO 2storage, it is only economically feasible under certain conditions.

    CCS COMPONENT CCS TECHNOLOGY RESEARCH PHASE DEMONSTRATION

    PHASE

    ECONOMICALLY

    FEASIBLE

    UNDER SPECIFIC

    CONDITIONS

    MATURE MARKET

    CAPTURE

    Post-combustion X

    Pre-combustion X

    Oxyfuel combustion X

    Industrial separation (natural gas processing, ammonia production) X

    TRANSPORTATIONPipeline X

    Shipping X

    GEOLOGICAL STORAGE

    Enhanced Oil Recovery (EOR) X

    Gas or oil fields X

    Saline formations X

    Enhanced Coal Bed Methane recovery (ECBM) X

    OCEAN STORAGEDirect injection (dissolution type) X

    Direct injection (lake type) X

    MINERAL CARBONATIONNatural silicate materials X

    Waste materials X

    INDUSTRIAL USES OF CO2

    X

    Table 3.3-1 Current Maturity of CCS System Components (IPCC, 2005)

    3.3 Maturity of Carbon Capture and Storage

    Investment into technologies for carbon capture and storage is increasingrapidly. Capturing CO

    2from process streams or combustion streams is

    a well-understood operation. Compression of CO2and injection into

    transportation pipelines is also well understood. Apart from Enhanced

    Oil Recovery, however, long-term storage of carbon dioxide is still in the earlyphases. Table 3.3-1, reproduced from the IPCC Special Report on CCS,summarizes the state of technology for each of the components and optionswith a CCS system.

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    3.4 Economics of CCS

    Hands-on CCS technology experience at scale is very limited globally, andtherefore cost estimates, technology selection choices, and performanceexpectations all have a high degree of uncertainty.

    In March 2009, the Alberta Carbon Capture and Storage Development Councilpublished its final report Accelerating CCS implementation in Alberta. It foundthat CO

    2capture represents 70 to 90 per cent of the overall costs of the CO

    2

    capture, transport and storage sequence. In addition, it found capture is thestep with the least amount of actual technology application and, accordingly,it is the area where there is significant cost uncertainty.

    To better understand the cost of capture, i t surveyed 27 companies known tobe interested in CCS. Data was collected on more than 20 facility conceptsfrom 10 companies. Cost estimates were $75 to $235 per tonne of CO

    2for

    chemical, refinery and oil sands capture, with SAGD boiler capture within the$175 to $235 range.

    Using this data, a cost curve was generated for all capturable CO2emissions

    in Alberta for the year 2020. The overall capture costs ranges from: $60 to$150 per tonne for coal fired power stations and oil refining/upgrading;$110 to $240 per tonne for oil sands upgrading; and $200 to $290 per tonnefor SAGD and gas fired sources.

    The Government of Alberta announced a $2 billion CCS fund in 2008 to help

    ensure that a first wave of three to five CCS demonstration projects wasinitiated. The Alberta CCS Development Councils final report estimated thatan investment of between $1 to $3 billion per year from the governments of

    Alberta and Canada will be required to promote further CCS projects afterthe first wave of demonstration plants.

    CO2Captured Cost Estimates CO

    2Captured Cost Curve

    Coal/Coke Gasifier

    Coal Post Comb.

    Coal - Oxyfired

    H2 - Benfield

    H2 - PSA (Process)

    H2 - PSA (Flue)

    SAGD Boilers

    0 25 60 75 100 125 150 175 200 225 260

    $/T CO2Abated

    Capture Cost Survey - Aggregated Results

    Chemical Refinery & Oilsands

    Coal Power + Solid Fuels

    Note: Based on over 50 interviews and 20 different facilities. Cost Ranges due to geographic,technical and greenfield vs. retrofit considerations

    Excludes pipeline, storage costs, credit from EOR sale, avoided offset purchase

    Capital costs in 2008 C$. Operating costs levelized at 2008 real $ cost (10% time value discount)

    CO2Abated Cost includes cost penalty for make up production and incremental CO

    2emissions

    from energy use (fuel and electricity)

    Source:Ian Murray and Co. Ltd.: Alberta CO2Capture Cost Survey and Supply Curve 2008

    , , ,.

    . .:

    ,

    .

    350

    300

    250

    200

    150

    100

    50

    0

    0 10 20 30 40 50 60 70 80

    . ,.

    , , ,

    .

    . .:

    Note: Includes all facilities estimated to be operating in Alberta by 2020 (existing and yet to be built)

    Reflects only capture costs, not pipeline or storage costs, nor credit from EOR, sale, nor avoided offsetpurchase Capital costs in 2008 C$. Operating costs levelized at 2008 real $ costs for fuel and operatio

    CO2Abated Cost includes penalty for make up production and incremental CO

    2emissions from

    energy use (fuel and electricity)

    Source:Ian Murray and Co. Ltd.: Alberta CO2Capture Cost Survey and Supply Curve

    CO2Volume Captured in MT/yr

    CO

    2

    Capturab

    leCost$/T

    CO

    2

    Abated

    Capturable CO2Emissions in Alberta (from existing and new large emitters)

    SAGD and GAS fired sources

    Predominately Oilsands Upgrading

    1/2 Coal Electricity, remainder Petroleumand Oil Refining/Upgrading

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    The most optimistic forecasts for CCS in the oil sands

    are reductions of between 30% and 50% by 2050.

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    PERSPECTIVES ON CCS4.1 ENGOs

    4.1.1 The Pembina Institute

    The Pembina Institute is cautious about CCS, viewing it as one of a numberof potentially effective technologies for reducing GHG emissions on the scalerequired to combat catastrophic climate change (Pembina, 2009). Theirposition recognises that even if CCS is acceptable as a means of storing CO

    2,

    capture is only realistic from large point sources. Thus only a portion of totalemissions would be available for storage. (Griffiths et al, 2005).

    Recognising the global realities, Pembina affirms that CCS provides atechnically feasible option to manage a portion of the CO

    2waste from

    this growth in fossil fuel use, especially in the rapidly growing economies

    of Southeast Asia (including China and India). Past research papers haveencouraged the oil sands operators to implement CCS in order to reducetheir impact without dwelling on the small portion of total carbon containedin the product this could account for. The Pembina Institute believes thatdevelopment and deployment of CCS in Canada should be conditionalupon a massive scale-up of energy efficiency and low-impact renewableenergy production; application of CCS in regional contexts; implementationof a strong regulatory framework; a fair distribution of investment betweentaxpayers and polluters, with polluters quickly shouldering the full cost ofCCS deployment; establishment by government of a price on emissionshigh enough to stimulate the adequate deployment of low/no emissiontechnologies, including CCS where appropriate; and an increase in publiceducation and awareness in order for CCS to be more widely accepted as aviable technology within a portfolio of solutions for reducing GHG emissions.

    4.1.2 Sierra Club

    The Sierra C lubs (SC) position on CCS is less favourable than that ofPembina. SC has focused on the broader energy implications or investingheavily into a technology that does not permanently address the link betweenenergy consumption and carbon emissions. SC emphasises the uncertaintiesand gaps in knowledge with respect to CO

    2retention in geological storage,

    and in particular, the uncertainties in long-term impacts. SC, therefore,encourages the focus of resources on other means of reducing carbonemissions, partic


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